‘Try building a screw factory’: Angel investor dismantles Trump’s made-in-America tariff illusion

“If you think tariffs are an incentive to build in the US, try building a screw factory,” investor and entrepreneur Balaji S. Srinivasan wrote on X, slamming Donald Trump’s tariff strategy as economically backward and disconnected from industrial realities. 

According to Srinivasan, these measures don’t encourage American manufacturing—they suffocate it with debt, layoffs, and price hikes.

In a detailed post, Srinivasan dismantled the logic behind steep tariffs, using a hypothetical example to show how a profitable US-based business can be turned upside down overnight.

“Suppose your US company imports $1M of high quality parts, and adds in its own components to produce finished goods sold for $1.2M per batch. Your gross profit is $200k per batch,” he wrote.

Now, impose a 30% tariff on the imported parts. The company is forced to pay $300,000 upfront at customs—cash it likely doesn’t have. “Even if you do sell everything, you’re now losing $100k per batch.”

This, Srinivasan says, is the brutal math of protectionism. Instead of reshoring production, tariffs end up punishing companies that still operate domestically but rely on global supply chains. "With a sinking feeling, you realize your profitable business... has suddenly become unprofitable."

To survive, such companies face impossible choices: take on debt, fire staff, downgrade quality, or hike prices. None of these options are sustainable, especially when customers themselves are reeling from similar tariff shocks.

“You are being asked to do the equivalent of growing a maple tree when all you needed was a little maple syrup,” Srinivasan said, mocking the idea that domestic factories can spring up overnight to replace well-established overseas suppliers.

He backed his argument with a stark visual: a bar chart comparing median part content by automaker country. American brands like Tesla and Ford show high US/Canada part content—often above 50%. But foreign brands like Mercedes, Porsche, and Jaguar barely register any North American sourcing, reflecting deep global dependencies.

The takeaway? “These tariffs don’t really give an incentive to build in the US,” Srinivasan concludes. “Instead what they likely mean is debt, layoffs, lower quality, and higher prices for any US company that buys parts abroad.”